TerrAscend Corp
For the period ended Sep 30, 2024. Filed Nov 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 6, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000950170-24-093867
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000950170-24-122252
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 181 previous paragraphs and 196 current paragraphs.
117 unchanged; 46 reworded; 28 added; 14 removed; 4 previous and 5 current paragraphs rearranged.
Tables are not compared: 23 previous and 24 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (28)
Current report
On August 13, 2024, the Company paid off and retired two promissory notes from the Pinnacle Acquisition with a payment of $5,582.
Current report
On August 20, 2024, the Company's board of directors (the "Board") approved a share repurchase program, which authorized the Company to repurchase up to 10 million common shares of the Company at any time, or from time to time, from August 22, 2024 until August 21, 2025. During the third quarter of 2024, the Company repurchased 107,400 common shares under the share repurchase program for total consideration of approximately $133. As of September 30, 2024, the Company had a total of 9,892,600 shares remaining that can be authorized for repurchase.
Current report
On October 1, 2024, the Company paid the outstanding principal amount of the Stadium Ventures Note of $539 and retired the promissory note.
Current report
On October 15, 2024, the statute of limitations for the Company’s 2020 amended tax returns expired, which resulted in refunds received of $8,361 being recognized as a tax benefit and no longer recognized as an uncertain tax position.
Current report
On November 5, 2024, the Company signed a definitive agreement providing it the option to acquire the assets of Ratio Cannabis LLC, a dispensary in Ohio.
Current report
Other operating expense (income)
Current report
Unrealized and realized (gain) loss on investments
Current report
Loss on extinguishment of debt represents the Company's debt that was retired prior to its scheduled maturity at a different amount than the book value and the amount paid.
Current report
Revenue decreased from $89,240 to $74,168 for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 primarily driven by a decline in retail sales in Michigan and New Jersey. The decline in retail sales was related to reduced discounting and promotions in Michigan leading to lower foot traffic and increased competitive pressure in New Jersey.
Current report
The increase of $2,253 in general and administrative expense for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, is primarily related to an increase in stock-based compensation due to a one-time modification for option expiry from five years to ten years. This was offset by a reduction in headcount.
Current report
Other operating expense (income)
Current report
During the three months ended September 30, 2024, Other operating expense (income) increased as compared to the three months ended September 30, 2023, primarily due to the derecognition of the Company's financial obligations and underlying assets in the third quarter of 2023.
Current report
During the three months ended September 30, 2024, Loss on extinguishment of debt increased as compared to the three months ended September 30, 2023, primarily due to extinguishment of the majority of the Company's debt in relation to the FG Loan which included write-offs of deferred financing costs.
Current report
Results from Operations - Nine Months Ended September 30, 2024 and September 30, 2023
Current report
During the nine months ended September 30, 2024, Loss on extinguishment of debt increased as compared to the nine months ended September 30, 2023, due to extinguishment of the majority of the Company's debt in relation to the FG Loan which included write-offs of deferred financing costs.
Current report
The provision for income taxes from $32,655 for the nine months ended September 30, 2023 increased to $34,773 for the nine months ended September 30, 2024 primarily due to an adjustment reflecting the impact of limitations on interest deductibility along with accrued interest and penalties related to the 280E Tax Position in 2024.
Current report
FocusGrowth Term Loan
Current report
On September 30, 2024, the Borrowers, and FG Agency Lending LLC, as the Administrative Agent entered into an amendment to the FG Loan to amend certain schedules and definitions.
Current report
As of September 30, 2024, there was an outstanding principal amount of $140,000 under the FG Loan.
Current report
On August 1, 2024, as described above, the Company entered into the FG Loan, of which, a portion of the proceeds from the Initial Draw was used to retire the Ilera Term Loan and pay the outstanding principal amount of $68,927.
Current report
On August 1, 2024, as described above, the Company entered into the FG Loan, of which, a portion of the proceeds from the Delayed Draw, which occurred on September 30, 2024, was used to retire the Chicago Atlantic Term Loan and pay the outstanding principal amount of $22,557.
Current report
On October 1, 2024, the Company paid the outstanding principal amount of $539 and retired the promissory note.
Current report
Share Repurchases
Current report
On August 20, 2024, the Board approved a share repurchase program to repurchase up to $10,000 of the Company’s common shares (“Shares”). The share repurchase program authorizes the Company to repurchase up to 10,000,000 common shares of the Company at any time, or from time to time, from August 22, 2024 until August 21, 2025. The share repurchase program authorizes the Company to repurchase up to 65,361 Shares daily, which represents 25% of the Company’s average daily trading volume on the Toronto Stock Exchange of 261,445 Shares. Any repurchases under the program may be made by means of open market transactions, negotiated block transactions, or otherwise, including pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. The size and timing of any repurchases will depend on price, market and business conditions, and other factors.
Current report
During the third quarter of 2024, the Company repurchased 107,400 common shares under the share repurchase program for total consideration of approximately $133. As of September 30, 2024, the Company had a total of 9,892,600 shares remaining that can be authorized for repurchase.
Current report
Represents the loss taken to extinguish certain debt.
Current report
m)
Current report
The decrease in Adjusted EBITDA from continuing operations for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 was primarily due to a decrease in gross profit driven by reduced sales. The decrease for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily due a decrease in gross profit margin.
Removed paragraphs (14)
Previous report
On April 30, 2024, the Company made a prepayment of the Ilera Term Loan of $3,200 at 100% to par.
Previous report
(Gain) loss from revaluation of contingent consideration
Previous report
Unrealized and realized loss (gain) on investments
Previous report
Loss from revaluation of contingent consideration
Previous report
During the three months ended June 30, 2024, Other operating (income) loss increased as compared to the three months ended June 30, 2023, primarily due to the Company recording a gain on lease termination of $1,169 related to its California business.
Previous report
The change in provision for income taxes from $6,448 for the three months ended June 30, 2023 as compared to a provision for income taxes of $10,729 for the three months ended June 30, 2024 was primarily driven by a higher gross profit margin in the second quarter of 2024.
Previous report
Results from Operations - Six Months Ended June 30, 2024 and June 30, 2023
Previous report
Revenue increased from $141,522 to $158,156 for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 primarily driven by the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023, as well as an increase in sales in New Jersey and Pennsylvania, partially offset by declines in California and Michigan.
Previous report
Loss from revaluation of contingent consideration
Previous report
During the six months ended June 30, 2024, Other operating (income) loss increased as compared to the six months ended June 30, 2023, primarily due to the Company recording a gain on lease termination of $1,169 related to its California business.
Previous report
As of June 30, 2024, there was an outstanding principal amount of $68,927 under the Ilera Term Loan. Subsequent to June 30, 2024, the Company entered into a four-year $140,000 senior secured term loan that matures in August 2028, of which, the proceeds were used to retire the Ilera Term Loan and pay the outstanding principal amount of $68,927.
Previous report
As of June 30, 2024, there was an outstanding principal amount of $24,196 under the Chicago Atlantic Term Loan. Subsequent to June 30, 2024, the Company made a prepayment of the Chicago Atlantic Term Loan of $1,500 at par. On August 1, 2024, the Company entered into a four-year $140,000 senior secured term loan that matures in August 2028, of which, a portion of the proceeds will be used to retire the Chicago Atlantic Term Loan and pay the outstanding principal amount of $22,696.
Previous report
As of June 30, 2024, there was an outstanding principal amount of $5,582 on the two promissory notes. The obligations are subject to restructuring upon the resolution of indemnity claims.
Previous report
The increase in Adjusted EBITDA from continuing operations for the three and six months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023 while cost of sales for the Company remained constant.
Reworded paragraphs (46)
Previous wording
This Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of the Company is for the three and six months ended June 30, 2024 and 2023 and the accompanying notes for each respective period.
Current wording
This Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of the Company is for the three and nine months ended September 30, 2024 and 2023 and the accompanying notes for each respective period.
Previous wording
On August 1, 2024, the Company and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., WDB Holding MI, Inc., Moose Curve Holdings, LLC, and Hempaid, LLC, including certain of each of their respective subsidiaries, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the Administrative Agent (the “Agent”) entered into a Loan Agreement (the “FG Loan”). The FG Loan provides for a four-year, $140,000 senior-secured term loan with an initial draw on August 1, 2024, upon closing of the FG Loan, of $114,000 (the “Initial Draw”) and a delayed draw of $26,000 expected to occur on September 30, 2024 (the “Delayed Draw”). Proceeds from the Initial Draw were used to retire the Ilera Term Loan, the Stearns Loan and certain other indebtedness (collectively, the “Retired Loans”), in addition to being used for working capital and general corporate purposes. As a result, each outstanding obligation under the Retired Loans were repaid in full and subsequently terminated. The proceeds from the Delayed Draw will be used to retire the Chicago Atlantic Term Loan. The FG Loan is guaranteed by the Company and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers. The FG Loan bears interest at 12.75% per annum and matures on August 1, 2028. Certain funds controlled by the Company’s Executive Chairman, Jason Wild, a related party of the Company, have invested approximately $7,500 under the FG Loan.
Current wording
On August 1, 2024, the Company and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., Moose Curve Holdings, LLC, Hempaid, LLC and, pursuant to a joinder agreement dated September 30, 2024, WDB Holding MI, Inc., including certain of each of their respective subsidiaries, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the Administrative Agent entered into a Loan Agreement (the “FG Loan”). The FG Loan provides for a four-year, $140,000 senior-secured term loan with an initial draw on August 1, 2024, of $114,000 (the “Initial Draw”) and a delayed draw on September 30, 2024 of $26,000 (the “Delayed Draw”). Proceeds from the FG Loan were used to retire the Ilera Term Loan, the Stearns Loan, the Chicago Atlantic Term Loan and certain other indebtedness (collectively, the “Retired Loans”), in addition to being used for working capital and general corporate purposes. Each outstanding obligation under the Retired Loans was repaid in full and subsequently terminated. The FG Loan is guaranteed by the Company and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers. On September 30, 2024, the Borrowers and FG Agency Lending LLC, as the Administrative Agent, entered into an amendment to the FG Loan to amend certain schedules and definitions.
Previous wording
Other operating (income) expense primarily represents (gains) losses on lease terminations and (gains) losses on disposal of fixed assets.
Current wording
Other operating expense (income) primarily represents (gains) losses on lease terminations and (gains) losses on disposal of fixed assets.
Previous wording
Unrealized and realized foreign exchange loss represents the loss recognized on the remeasurement of USD denominated cash and other assets recorded in the Canadian dollars functional currency at the Company's Canadian operations.
Current wording
Unrealized and realized foreign exchange (gain) loss represents the (gain) loss recognized on the remeasurement of USD denominated cash and other assets recorded in the Canadian dollars functional currency at the Company's Canadian operations.
Previous wording
The increase of $3,942, in cost of sales for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was mainly due to an increase in sales. Cost of sales as a percentage of revenue was relatively constant for the three months ended June 30, 2024, as compared to the three months ended June 30, 2023.
Current wording
The decrease of $3,483, in cost of sales for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 was mainly due to a decrease in sales. Cost of sales as a percentage of revenue increased primarily due to a decline in sales for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.
Previous wording
The loss from the revaluation of contingent consideration for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 was due to a loss on the revaluation of contingent liability for State Flower, The Apothecarium, and Peninsula acquisition resulting from a decrease in the Company's share price on June 30, 2024, as compared to March 31, 2024.
Current wording
The loss from the revaluation of contingent consideration for the three months ended September 30, 2024 as compared to the gain from the revaluation of contingent consideration for the three months ended September 30, 2023 was due to a loss on the revaluation of contingent liability for State Flower, The Apothecarium, and Peninsula acquisition resulting from a decrease in the Company's share price.
Previous wording
The warrant liability was remeasured to fair value at June 30, 2024 using the Black-Scholes Model. The Company recognized a gain of $2,922 during the three months ended June 30, 2024 as a result of the reduction of the Company's share price from June 30, 2024, as compared to March 31, 2024.
Current wording
The warrant liability was remeasured to fair value at September 30, 2024 using the Black-Scholes Model. The Company recognized a gain of $669 during the three months ended September 30, 2024 as a result of the reduction of the Company's share price.
Previous wording
During the three months ended June 30, 2023, the Company recognized a gain on fair value warrants of $215 as a result of the reduction of the Company's share price from June 30, 2023, as compared to March 31, 2023.
Current wording
During the three months ended September 30, 2023, the Company recognized a loss on fair value warrants of $3,217 as a result of the reduction of the Company's share price.
Previous wording
The change in provision for income taxes from $19,112 for the six months ended June 30, 2023 as compared to a provision for income taxes of $20,400 for the six months ended June 30, 2024 was primarily driven by higher gross profit margin.
Current wording
The change in provision for income taxes from $13,543 for the three months ended September 30, 2023 as compared to a provision for income taxes of $14,373 for the three months ended September 30, 2024 was primarily driven by accrued interest and penalties.
Previous wording
The following tables represent the Company’s results from operations for the six months ended June 30, 2024 and 2023.
Current wording
The following tables represent the Company’s results from operations for the nine months ended September 30, 2024 and 2023.
Previous wording
Revenue increased from $72,124 to $77,523 for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 primarily driven by the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023, as well as an increase in sales in New Jersey and Pennsylvania, partially offset by declines in California and Michigan.
Current wording
Revenue increased from $230,762 to $232,324 for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 primarily driven by the implementation of adult-use sales in Maryland and the Company's four Maryland acquisitions in 2023 combined with growth in wholesale across Pennsylvania, New Jersey, and Maryland, partially offset by retail declines in New Jersey and Michigan.
Previous wording
The increase of $10,346 in cost of sales for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was mainly due to an increase in sales. Cost of sales as a percentage of revenue was relatively constant for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023.
Current wording
The increase of $6,863 in cost of sales for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 was mainly due to an increase in sales and an increase in cost of sales as a percentage of revenue. Cost of sales as a percentage of revenue for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 increased primarily due to higher input costs and higher costs per pound, which reduced gross profit margins.
Previous wording
The decrease of $6,416 in general and administrative expense for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, is primarily related to a bad debt recovery of $4,188 as well as an insurance recovery of $871.
Current wording
The decrease of $3,885 in general and administrative expense for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, is primarily related to a bad debt recovery of $4,188 as well as an insurance recovery of $871.
Previous wording
The loss from the revaluation of contingent consideration for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 was due to a loss on the revaluation of contingent liability for State Flower, The Apothecarium, and Peninsula acquisition resulting from a decrease in the Company's share price on June 30, 2024, as compared to December 31, 2023.
Current wording
The loss from the revaluation of contingent consideration for the nine months ended September 30, 2024 as compared to the gain from the revaluation of contingent consideration nine months ended September 30, 2023 was due to a loss on the revaluation of contingent liability for State Flower, The Apothecarium, and Peninsula acquisition resulting from a decrease in the Company's share price.
Previous wording
The warrant liability was remeasured to fair value at June 30, 2024 using the Black-Scholes Model. The Company recognized a gain of $1,939 during the six months ended June 30, 2024 as a result of the reduction of the Company's share price from June 30, 2024, as compared to December 31, 2023.
Current wording
The warrant liability was remeasured to fair value at September 30, 2024 using the Black-Scholes Model. The Company recognized a gain of $2,608 during the nine months ended September 30, 2024 as a result of the reduction of the Company's share price.
Previous wording
During the six months ended June 30, 2023, the Company recognized a gain on fair value warrants of $653 as a result of the reduction of the Company's share price from June 30, 2023, as compared to December 31, 2022.
Current wording
During the nine months ended September 30, 2023, the Company recognized a loss on fair value warrants of $2,564 as a result of the increase of the Company's share price.
Previous wording
During the six months ended June 30, 2024, the Company recorded an impairment of property and equipment of $2,438 due to the wind-down of one of its California dispensaries.
Current wording
During the nine months ended September 30, 2024, the Company recorded an impairment of property and equipment of $2,438 due to the wind-down of one of its California dispensaries.
Previous wording
The Company previously concluded that substantial doubt existed as to its ability to continue as a going concern primarily due to the Company's current liabilities exceeding its current assets related to its loans maturing within the current year. On August 1, 2024, the Company entered into a four-year $140,000 senior secured term loan with an initial draw of $114,000 used to retire the majority of its loans coming due within the next year and a delayed draw of $26,000, expected to occur on September 30, 2024 which will be used to retire the Chicago Atlantic Term Loan resulting in positive net working capital for the Company. See Note 10 and Note 25 for more information regarding the refinancing.
Current wording
The Company previously concluded that substantial doubt existed as to its ability to continue as a going concern primarily due to the Company's current liabilities exceeding its current assets related to its loans maturing within the current year. During the period ended on September 30, 2024, the Company entered into a four-year $140,000 senior secured term loan which was primarily used to retire a majority of the Company's loans coming due within the next year. See Note 10 for more information regarding the refinancing.
Previous wording
Since its inception, the Company's primary sources of capital have been through the issuance of equity securities or debt facilities, and the Company has received aggregate net proceeds from such transactions totaling $656,143 as of June 30, 2024.
Current wording
Since its inception, the Company's primary sources of capital have been through the issuance of equity securities or debt facilities, and the Company has received aggregate net proceeds from such transactions totaling $782,388 as of September 30, 2024.
Previous wording
The Company has $191,625 in principal amounts of loans payable at June 30, 2024. Of this amount, $15,402 are due within the next twelve months.
Current wording
The Company has $205,733 in principal amounts of loans payable at September 30, 2024. Of this amount, $8,387 are due within the next twelve months.
Previous wording
The Company has entered into leases for certain premises and offices for which it owes monthly lease payments. The Company has $89,909 in lease obligations. Of this amount, $7,357 are due in the next twelve months.
Current wording
The Company has entered into leases for certain premises and offices for which it owes monthly lease payments. The Company has $89,849 in lease obligations. Of this amount, $9,402 are due in the next twelve months.
Previous wording
The Company's undiscounted contingent consideration payable is $4,741 at June 30, 2024, of which, $2,632 is due in the next twelve months. The contingent consideration payable relates to the Company's acquisitions of Peninsula and the remaining 50.1% equity in both State Flower and three Apothecarium dispensaries in California. The contingent considerations are based upon the price protection of Common Shares issued under the terms of the applicable acquisition agreements. The contingent considerations are measured at fair value using the Black-Scholes Model and revalued at the end of each reporting period.
Current wording
The Company's undiscounted contingent consideration payable is $4,373 at September 30, 2024, of which, $2,546 is due in the next twelve months. The contingent consideration payable relates to the Company's acquisitions of Peninsula and the remaining 50.1% equity in both State Flower and three Apothecarium dispensaries in California. The contingent considerations are based upon the price protection of Common Shares issued under the terms of the applicable acquisition agreements. The contingent considerations are measured at fair value using the Black-Scholes Model and revalued at the end of each reporting period.
Previous wording
At June 30, 2024, the Company had accounts payable and accrued liabilities of $46,918 and corporate income taxes payable of $3,184.
Current wording
At September 30, 2024, the Company had accounts payable and accrued liabilities of $46,381 and corporate income taxes payable of $11,075.
Previous wording
On December 18, 2020, WDB Holding PA, a subsidiary of TerrAscend, entered into a senior secured term loan with a syndicate of lenders in the amount of $120,000 (the “Ilera Term Loan”). The Ilera Term Loan is solely secured by Ilera. The Ilera Term Loan bears interest at 12.875% per annum and matures on December 17, 2024. Subject to certain conditions of the agreement, the Company has the ability to increase the facility by up to $30,000. WDB Holding PA's obligations under the Ilera Term Loan and related transaction documents are guaranteed by the Company, TerrAscend USA, Inc. ("TerrAscend USA"), and certain subsidiaries of WDB Holding PA, and secured by TerrAscend USA's equity interest in WDB Holding PA and substantially all of the assets of WDB Holding PA and the subsidiary guarantors party thereto. The loan can be refinanced at the option of the WDB Holding PA after 18 months from the closing date subject to a premium payment due. Of the total proceeds received, $105,767 was used to satisfy the remaining Ilera earn-out payments.
Current wording
On December 18, 2020, WDB Holding PA, a subsidiary of TerrAscend, entered into a senior secured term loan with a syndicate of lenders in the amount of $120,000 (the “Ilera Term Loan”). The Ilera Term Loan was solely secured by Ilera. The Ilera Term Loan bore interest at 12.875% per annum and was set to mature on December 17, 2024. Subject to certain conditions of the agreement, the Company had the ability to increase the facility by up to $30,000. WDB Holding PA's obligations under the Ilera Term Loan and related transaction documents were guaranteed by the Company, TerrAscend USA, Inc. ("TerrAscend USA"), and certain subsidiaries of WDB Holding PA, and secured by TerrAscend USA's equity interest in WDB Holding PA and substantially all of the assets of WDB Holding PA and the subsidiary guarantors party thereto. The loan could be refinanced at the option of the WDB Holding PA after 18 months from the closing date subject to a premium payment due. Of the total proceeds received, $105,767 was used to satisfy the remaining Ilera earn-out payments.
Previous wording
On April 28, 2022, the Ilera Term Loan was amended to provide WDB Holding PA with greater flexibility by resetting the minimum consolidated interest coverage ratio levels that must be satisfied at the end of each measurement period and extending the date in which WDB Holding PA is required to deliver its budget for the fiscal year ending December 31, 2021. In addition, the no-call period was extended from 18 months to 30 months, subject to a premium payment. This modification was not considered extinguishments of debt under ASC 470, Debt.
Current wording
On April 28, 2022, the Ilera Term Loan was amended to provide WDB Holding PA with greater flexibility by resetting the minimum consolidated interest coverage ratio levels that must be satisfied at the end of each measurement period and extending the date in which WDB Holding PA was required to deliver its budget for the fiscal year ending December 31, 2021. In addition, the no-call period was extended from 18 months to 30 months, subject to a premium payment. This modification was not considered extinguishments of debt under ASC 470, Debt.
Previous wording
On December 4, 2023, the parties entered into an amendment that requires WDB Holding PA to make a prepayment of $4,800 by January 2, 2024 and a prepayment of $3,200 by April 30, 2024, at the prepayment price of 100% to par. On January 2, 2024, the Company made a prepayment of $4,800 of the Ilera Term Loan, at the prepayment price of 100% to par.
Current wording
On December 4, 2023, the parties entered into an amendment that required WDB Holding PA to make a prepayment of $4,800 by January 2, 2024 and a prepayment of $3,200 by April 30, 2024, at the prepayment price of 100% to par. On January 2, 2024, the Company made a prepayment of $4,800 of the Ilera Term Loan, at the prepayment price of 100% to par.
Previous wording
In connection with the Gage Acquisition, the Company assumed a senior secured term loan (the "Chicago Atlantic Term Loan") with an acquisition date fair value of $53,857. The credit agreement bears interest at a rate equal to the greater of (i) the Prime Rate plus 7% or (ii) 10.25%. The term loan was payable monthly and had a maturity date of November 30, 2022. The Chicago Atlantic Term Loan was secured by a first lien on all Gage Growth assets. As a result of the amendment, the Company paid a loan amendment fee of $1,109 which was capitalized.
Current wording
In connection with the Gage Acquisition, the Company assumed a senior secured term loan (the "Chicago Atlantic Term Loan") with an acquisition date fair value of $53,857. The credit agreement bore interest at a rate equal to the greater of (i) the Prime Rate plus 7% or (ii) 10.25%. The term loan was payable monthly and had a maturity date of November 30, 2022. The Chicago Atlantic Term Loan was secured by a first lien on all Gage Growth assets. As a result of the amendment, the Company paid a loan amendment fee of $1,109 which was capitalized.
Previous wording
On August 10, 2022, the Chicago Atlantic Term Loan was amended as a result of the corporate restructure in conjunction with the Gage Acquisition. The amendment to the Chicago Atlantic Term Loan includes the addition of a borrower and guarantor under the term loan and a right of first offer in favor of the administrative agent for a refinancing of the term loan. This amendment was not considered extinguishment of debt under ASC 470, Debt.
Current wording
On August 10, 2022, the Chicago Atlantic Term Loan was amended as a result of the corporate restructure in conjunction with the Gage Acquisition. The amendment to the Chicago Atlantic Term Loan included the addition of a borrower and guarantor under the term loan and a right of first offer in favor of the administrative agent for a refinancing of the term loan. This amendment was not considered extinguishment of debt under ASC 470, Debt.
Previous wording
On November 29, 2022, the Company repaid $30,000 outstanding principal amount on the Chicago Atlantic Term Loan. On November 30, 2022, the remaining loan principal amount of $25,000 on the Chicago Atlantic Term Loan was amended (the "Amended Chicago Atlantic Term Loan"). The Amended Chicago Atlantic Term Loan bears interest on $25,000 at a per annum rate equal to the greater of (i) the U.S. "prime rate" plus 6.00%, and (ii) 13.0% and matures on November 1, 2024. Commencing on May 31, 2023, the Company will make monthly principal repayments of 0.40% of the aggregate principal amount outstanding. Additionally, the unpaid principal amount of the loan shall bear paid in kind interest at a rate of 1.50% per annum. No prepayment fees are owed if the Company voluntarily prepays the loan after 18 months. If such prepayment occurs prior to 18 months, a prepayment fee equal to all of the interest on the loans that would be due after the date of such prepayment, is owed. Under the Amended Chicago Atlantic Term Loan, the Company has the ability to borrow incremental term loans of $30,000 at the option of the Company and subject to consents from the required lenders. The additional $30,000 incremental term loans available under the amendment have not been drawn as of December 31, 2023. This loan represents a loan syndication, and therefore the Company assessed each of the lenders separately under ASC 470, Debt to determine if this represents a modification, or an extinguishment of debt. For three of the four remaining lenders, it was determined that this was a modification. For the remaining lender, it was determined that this represented an extinguishment of debt and therefore the fees paid to the lenders on modification were expensed. As a result of this transaction, the Company expensed $1,907 of fees paid to the lenders and third parties as they did not meet the criteria for capitalization under ASC 470, Debt.
Current wording
On November 29, 2022, the Company repaid $30,000 outstanding principal amount on the Chicago Atlantic Term Loan. On November 30, 2022, the remaining loan principal amount of $25,000 on the Chicago Atlantic Term Loan was amended (the "Amended Chicago Atlantic Term Loan"). The Amended Chicago Atlantic Term Loan bore an interest on $25,000 at a per annum rate equal to the greater of (i) the U.S. "prime rate" plus 6.00%, and (ii) 13.0% and was set to mature on November 1, 2024. Commencing on May 31, 2023, the Company made monthly principal repayments of 0.40% of the aggregate principal amount outstanding. Additionally, the unpaid principal amount of the loan bore paid in kind interest at a rate of 1.50% per annum. No prepayment fees were owed if the Company voluntarily prepaid the loan after 18 months. If such prepayment occurred prior to 18 months, a prepayment fee equal to all of the interest on the loans that would be due after the date of such prepayment, was owed. Under the Amended Chicago Atlantic Term Loan, the Company had the ability to borrow incremental term loans of $30,000 at the option of the Company and subject to consents from the required lenders. The additional $30,000 incremental term loans available under the amendment were not drawn as of December 31, 2023. This loan represents a loan syndication, and therefore the Company assessed each of the lenders separately under ASC 470, Debt to determine if this represented a modification, or an extinguishment of debt. For three of the four remaining lenders, it was determined that this was a modification. For the remaining lender, it was determined that this represented an extinguishment of debt and therefore the fees paid to the lenders on modification were expensed. As a result of this transaction, the Company expensed $1,907 of fees paid to the lenders and third parties as they did not meet the criteria for capitalization under ASC 470, Debt.
Previous wording
The Pinnacle Acquisition purchase price included two promissory notes in an aggregate amount of $10,000 to pay down all Pinnacle liabilities and encumbrances. The promissory note matures on June 30, 2023 and bears interest rates of 6%. On June 27, 2023, Spartan Partners Properties, LLC, agreed to an amendment among other things, to extend the obligation date of the loan until December 1, 2023.
Current wording
The Pinnacle Acquisition purchase price included two promissory notes in an aggregate amount of $10,000 to pay down all Pinnacle liabilities and encumbrances. The promissory note was set to mature on June 30, 2023 and bore interest rates of 6%. On June 27, 2023, Spartan Partners Properties, LLC, agreed to an amendment among other things, that extended the obligation date of the loans until December 1, 2023. On August 13, 2024, the Company paid the outstanding principal amount of $5,582 and retired the promissory notes.
Previous wording
On June 26, 2023, the Company closed on a $25,000 commercial loan with Stearns Bank, secured by the Company's cultivation facility in Pennsylvania and its Allegany Medical Marijuana Dispensary ("AMMD") dispensary in Cumberland, Maryland (the “Stearns Loan”). The Company was required to hold $5,000 on deposit in a restricted account, of which $2,500 of the restricted cash was released on July 28, 2023 upon meeting certain criteria pursuant to the terms of the Stearns Loan. The Stearns Loan bears interest at a rate of prime plus 2.25% and matures on December 26, 2024. The proceeds from the loan were used to pay down the Company's higher interest rate debt, thereby lowering the Company's overall interest expense.
Current wording
On June 26, 2023, the Company closed on a $25,000 commercial loan with Stearns Bank, secured by the Company's cultivation facility in Pennsylvania and its Allegany Medical Marijuana Dispensary ("AMMD") dispensary in Cumberland, Maryland (the “Stearns Loan”). The Company was required to hold $5,000 on deposit in a restricted account, of which $2,500 of the restricted cash was released on July 28, 2023 upon meeting certain criteria pursuant to the terms of the Stearns Loan. The Stearns Loan bore interest at a rate of prime plus 2.25% and was set to mature on December 26, 2024. The proceeds from the loan were used to pay down the Company's higher interest rate debt, thereby lowering the Company's overall interest expense.
Previous wording
As of June 30, 2024, there was an outstanding principal amount of $24,638 under the Stearns Loan. Subsequent to June 30, 2024, the Company entered into a four-year $140,000 senior secured term loan that matures in August 2028, of which, the proceeds were used to retire the Stearns Loan and pay the outstanding principal amount of $24,638.
Current wording
On August 1, 2024, as described above, the Company entered into the FG Loan, of which, a portion of the proceeds from the Initial Draw was used to retire the Stearns Loan and pay the outstanding principal amount of $24,638.
Previous wording
As of June 30, 2024, there was an outstanding principal amount of $19,115 under the promissory notes related to the Maryland acquisitions.
Current wording
As of September 30, 2024, there was an outstanding principal amount of $18,576 under the promissory notes related to the Maryland acquisitions.
Previous wording
In connection with the Gage Acquisition, the Company assumed existing indebtedness in the form of a promissory note in the amount of $4,065, which matures on December 31, 2024. The promissory note bears interest at a rate of 6%. As of June 30, 2024, there was an outstanding principal amount of $936 on the promissory note.
Current wording
In connection with the Gage Acquisition, the Company assumed existing indebtedness in the form of a promissory note in the amount of $4,500, which was set to mature on January 1, 2024. The promissory note bore interest at a rate of 6%. As of September 30, 2024, there was an outstanding principal amount of $539 on the promissory note.
Previous wording
The increase of $17,260 in net cash provided by operating activities for the six months ended June 30, 2024 as compared to six months ended June 30, 2023 is due primarily to growth in revenue and gross margin while maintaining SG&A expenses relatively flat. Additionally, the change was driven by $2,881 of cash received for a bad debt recovery and an income tax refund related to the amended federal tax return for tax year 2020 in the amount of $8,371.
Current wording
The increase of $10,151 in net cash provided by operating activities for the nine months ended September 30, 2024 as compared to nine months ended September 30, 2023 is primarily driven by $2,881 of cash received for a bad debt recovery and an income tax refund related to the amended federal tax return for tax year 2020 in the amount of $8,361.
Previous wording
The net cash used in investing activities for the six months ended June 30, 2024 primarily relates to the investment in property and equipment of $4,272.
Current wording
The net cash used in investing activities for the nine months ended September 30, 2024 primarily relates to the investment in property and equipment of $4,623 and the investment in note receivable of $1,556 related to a settlement agreement.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2023 primarily relates to the cash paid for the acquisition of three dispensaries in Maryland of $14,469. Additionally, the Company increased the investment in property and equipment by $5,426 during the six months ended June 30, 2023. The Company also recognized a disposal of fixed assets related to its discontinued operations of $14,285.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2023 primarily relates to the cash paid for the acquisition of three dispensaries in Maryland. Additionally, the Company increased the investment in property and equipment by $6,224 during the nine months ended September 30, 2023. The Company also recognized a disposal of fixed assets related to its discontinued operations of $14,285.
Previous wording
Cash flows (used in) provided by financing activities
Current wording
Cash flows used in financing activities
Previous wording
Net cash used in financing activities for the six months ended June 30, 2024 was primarily due to net loan principal payments of $18,048 and distributions to minority partners of $2,283.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2024 was primarily due to net loan principal payments of $14,889, distributions to non-controlling interests of $4,433, and the repurchase of common shares of $138.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2023 was primarily due to cash inflow as a result of transfer with recourse of Employee Retention Credit of $12,677, net proceeds from the commercial loan with Stearns bank of $23,872, and net proceeds from private placements of $19,218, offset by loan principal paid of $40,359 and distributions to minority partners of $3,415.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2023 was primarily due to $46,029 in loan principal paid and $6,966 in distributions to non-controlling interests, offset by cash inflow as a result of transfer with recourse of Employee Retention Credit of $12,677, net proceeds from the commercial loan with Stearns bank of $23,872, and net proceeds from private placements of $21,260.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
On August 1, 2024, the Company and TerrAscend USA, Inc., as guarantors, and each of WDB Holding CA, Inc., WDB Holding PA, Inc., Moose Curve Holdings, LLC, Hempaid, LLC and, pursuant to a joinder agreement dated September 30, 2024, WDB Holding MI, Inc., including certain of each of their respective subsidiaries, as borrowers (collectively, the “Borrowers”), and FG Agency Lending LLC, as the Administrative Agent entered into a Loan Agreement (the “FG Loan”). The FG Loan provides for a four-year, $140,000 senior-secured term loan with an initial draw on August 1, 2024 of $114,000 (the “Initial Draw”) and a delayed draw on September 30, 2024 of $26,000 (the “Delayed Draw”).
Current report — wording carried from elsewhere
Proceeds from the FG Loan were used to retire the Ilera Term Loan, the Stearns Loan, the Chicago Atlantic Term Loan and certain other short-term indebtedness (collectively, the “Retired Loans”), in addition to being used for working capital and general corporate purposes. Each outstanding obligation under the Retired Loans was repaid in full and subsequently terminated.
Current report — wording carried from elsewhere
The FG Loan bears interest at 12.75% per annum and matures on August 1, 2028. The FG Loan is guaranteed by the Company and TerrAscend USA, Inc. and is secured by substantially all of the assets of the Borrowers.
Current report — wording carried from elsewhere
On July 19, 2024, the Company made a prepayment of the Chicago Atlantic Term Loan of $1,500 at par.
Current report — wording carried from elsewhere
Such information is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Loss (gain) on fair value of derivative liabilities and purchase option derivative assets
Previous report — wording carried elsewhere
Gain on fair value of derivative liabilities and purchase option derivative assets
Previous report — wording carried elsewhere
The decrease of $6,138 in general and administrative expense for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, is primarily related to a bad debt recovery of $4,188 as well as an insurance recovery of $871.
Previous report — wording carried elsewhere
Loss (gain) on fair value of derivative liabilities and purchase option derivative assets